As COVID-19 mortgage bailouts begin to expire, there is some concern that a Tampa foreclosure crisis looms ahead, but experts predict that this is an unlikely situation.
Tampa Foreclosure Crisis Is Unlikely Despite Expiring Bailouts
Overall, 3.1% of all outstanding mortgages (1.68 million) are in forbearance programs, but fewer people are applying for the program. But what about the homeowners who are still in need of assistance with mortgage payments?
The recent increase in home prices has done those homeowners a favor. As home prices increase, homeowners claim more equity in their homes and increased equity means that these homeowners are at least in a better position now than they were when the pandemic began. Amazingly, home prices (according to CoreLogic) have increased an incredible 18% since July 2020. Some states have even seen a bigger jump in home prices with Idaho seeing a 33% jump and Arizona seeing 28%!
What does more equity mean? It means that even borrowers who have fallen behind on their mortgage payments can claim enough equity in their homes to sell in the current housing economy and still make a profit on the sale. In fact, 93% of homeowners who are in financial trouble, own 10%+ equity in their home.
What do the numbers say about home owners home equity? According to the data, home equity went up from just over $6 trillion at the beginning of the pandemic to over $9 trillion at the end of the COVID-19 pandemic!
The numbers show there is an estimated $313 billion in mortgage payments that are currently unpaid; however, the number of active mortgage forbearance plans dropped by over 5%. The drop – caused by the August expiration of forbearance plans – is said to be the precursor to 400,000 more expirations in September – the time frame that coincides with the peak application period for COVID forbearance programs in March and April.
Other experts argue that the fact that such a large percentage of homeowners have 10%+ equity in their homes means that there will be less “distressed inflow” into the real estate market. These experts also argue that homeowners are much more likely to go back to making timely mortgage payments knowing that they have a good percentage of equity in their homes.
Ben Graboske, the president of data and analytics for Black Knight, suggests that homeowners who want to return to making regular mortgage payments, but who are potentially going to face difficulties making full payments, contact their lenders to discuss loan modification.
Will home prices continue to go up? The experts say that yes, as millennials reach their homebuying years, home price appreciation will continue to escalate!
The numbers have raised questions, though. Despite the fact that home prices are going up, foreclosure rates are up 27% in August over July – experts explain this as a low scale jump compared to the foreclosure rates in August 2019 before the COVID-19 pandemic. Even as the rates of foreclosure increase as more homeowners come out of their forbearance period, Rick Sharga, executive vice president at RealtyTrac, an Attom company that lists foreclosed properties for sale, says that foreclosure rates are still expected to stay below normal levels through until the end of 2021.
Looking For Home Foreclosure Help in Florida?
If you are in need of a reputable attorney who can help you go through the foreclosure process and even appeal for an alternate solution to make your mortgage payments more affordable so that you don’t find yourself slipping further into debt. Weidner Law has helped many Florida homeowners to maintain ownership of their homes despite delinquent payments and they are happy to help you with your foreclosure process too. To find out more about how Weidner Law can help you, call their office today at 727-954-8752.